Business owners say downtown bar ban waters down creativity

Will Brady talks about the impacts of an 18-year-old moratorium on liquor licenses on Wednesday in Chico. Brady is working with the city and police chief to address regulations as he prepares to open his restaurant on Broadway Street.(Bill Husa/Staff Photo)

CHICO — Eighteen years after a moratorium was placed on new alcohol licenses in downtown Chico, existing permits have become hot commodities that fetch high prices and are coveted.

New and upcoming bar and restaurant owners call the cap on licenses detrimental. They allege it hasn't curbed alcohol abuse, stifles new and creative businesses, and puts an economic burden on well-intentioned entrepreneurs.

"At the end of the day, it doesn't curb the drinking issues we are trying to tackle, and it gives those businesses who have licenses a monopoly," said Rob Rasner of the planned Winchester Goose craft beer lounge.

"It lets mediocre business thrive because they have something no one else can get."

Special regulations were added to the city's municipal code in 1995 that prohibit any new bar or drinking establishment licenses after Jan. 1, 1995. Fundraising activities and relocations were exempted.

The resulting impact has been the rare opportunity for new licenses downtown occurs when a business closes its doors and sells its permit.

When Will Brady, owner of the Banshee, learned The Black Crow on Salem Street was closing four years ago, he quickly shelled out $50,000 for its Type 47 liquor license with visions of creating an upscale bar and restaurant. He eventually secured a location on Broadway where he plans to open a seafood-based gastropub this fall.

When Jimmy Jack's Rib Shack on Main Street closed, Brady again stepped forward with another $50,000 for that license — this time envisioning a boutique bowling alley.

"That is why we bought these licenses — because they were special," he said. "There weren't going to be any more of them."

The Boston-to-Chico transplant knows he could spend his money other ways but he has visions of improving downtown's vibrancy with more diverse dining and nightlife options.

"We want Chico to be better," he said.

Facing challenge

Yet, seven years after he had opened the Banshee, Brady never anticipated the hurdles he would face with the community's recent perspective on alcohol.

A necessary alcohol license transfer to his new business created an opportunity for new conditions on the permit. An added clause for consumption to end at 11 p.m. challenged both his business model and chance at profitability, and brought him full tilt into the community's drinking discussions.

Rasner found himself in a different but not dissimilar situation. He had moved into Bustolini's former space at West Eighth Street and Broadway but the sandwich shop's license type wasn't compatible. He needed a Type 42 license instead.

That required a declaration of public convenience or necessity because such licenses are overconcentrated in that area. Far into the process, it was discovered Rasner may also be into the restricted zoning area.

Even though the brick building is the original Chico Brewery and housed the Bank Club bar decades ago, if the proper license wasn't owned as of Jan. 1, 1995, it doesn't meet the grandfather statute.

Rasner is optimistic his license situation will work out — Police Chief Kirk Trostle is recommending Tuesday that the City Council approve the permit — but he still objects to the moratorium.

With no competition to drive improvements, he said, lower quality becomes acceptable.

"That is what a bleak future looks like," Rasner said. "But if every single downtown business was a bar and restaurant, it wouldn't be that way for long because the cream is going to rise to the top."

Changing downtown

Brady thinks such businesses are the solution to downtown's challenges.

"I think there should be a different kind of place for every different person," he said. "That would be a great way to take back downtown — put more people down there who don't cause problems."

Yet as it stands, creative new businesses will continued to be stifled by the moratorium and high cost of obtaining an existing license, Brady and Rasner said.

Some licenses for downtown bars have been sold for more than six figures but it only costs $13,800 for a Type 47 alcohol license directly from the state Department of Alcoholic Beverage Control.

Spokesman John Carr said businesses in areas with moratoriums can sell them for as much as they want.

"That is determined on the open market."

Both Rasner and Brady have invested hundreds of thousands of dollars into their businesses and say the city's process for starting a bar and restaurant is not effective.

"It makes doing a business plan a gamble," Brady said.

He proposes an advisory committee to oversee any alcohol licenses — new and existing — and address them on a case-by-case basis.

After months of negotiating, he heard Friday from Trostle that the recommendation to the City Council Tuesday is to have last call for the B Street Oyster Co., at midnight instead of 11 p.m. It's up to the council to agree and request the ABC follow suit.

"We are totally psyched," Brady said. "For us, it's perfect."

Rasner hopes this current dialogue about licenses and conditions can be something to help other business owners in the future.

"This is a really good opportunity for people with liquor licenses to step forward and be proactive in their own fate and at the same time be accountable for how their activities are affecting this town," he said.